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iPhones seller Apple (NASDAQ:AAPL) cheered the market with record profits swollen by strong demand in China. Shares rose in morning trades.
Apple’s full-year net income of US$53bn was not only the biggest annual profit number in the company’s history; it was the biggest profit declared by any company, topping Exxon Mobil’s US$45.2bn in 2008.
Since falling into line with the rest of the smartphone market and introducing models with a bigger screen, the company’s iPhone sales have gone through the roof in China, where a larger screen is considered essential because of the logograms used in Chinese text.
In the final three months of its fiscal year, Apple sold 48.04mln iPhones, up 22% year-on-year despite the reporting period containing just two days of sales for the company’s new 6s and 6s Plus models. On the downside, the number was below the 48.72mln that was the consensus forecast of investment analysts.
Fourth quarter revenue rose 22% from a year earlier to US$51.5bn, but the company warned that the comparative figures get harder to beat in the current quarter, which includes the crucial run-up to Christmas.
The company said it expects sales in the Christmas quarter would be up just a smidgen on last year at around US$75.5bn to US$77.5bn.
There was also disappointing news on the iPad front, as sales of the Apple tablet computer fell by a fifth to their lowest level since 2011, reviving fears that Apple has become, like Blackberry, more or less a one product company.
Swiss banking giant UBS said it was a solid quarter from the consumer electronics giant.
“Revenue growth of 99% in Greater China was impressive given a declining smartphone market ex-Apple,” UBS noted.
Apple is not known for its humility, and its chief executive Tim Cook said you wouldn't know there was an economic slowdown based on Apple's results.
“In addition, he indicated that iPhone units and revenue should be up YoY in the Dec quarter, answering one of the stock's debates,” UBS said.
“In recent weeks investor concern has turned to the March quarter given Apple supply chain misses. Demand and supply should be in balance by the end of the Dec quarter. We model a 21% sequential revenue decline in March. While there may be some risk, Chinese New Year and a record 30% of sales going to switchers should help,” UBS declared, as it maintained its ‘buy’ recommendation.
Shares in Apple advanced 3.01% to $118 in New York.